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Bank of Lithuania slashes growth forecast for 2016

Xinhua, December 16, 2015 Adjust font size:

The Lithuanian economy is to grow faster next year but at a slower rate than previously projected, the Bank of Lithuania's updated forecast showed on Tuesday.

The country's central bank expects Lithuania's economy to grow by 1.7 percent this year and 2.9 percent next year. Three months ago, it forecast a growth of 1.6 percent and 3.2 percent respectively.

Lithuania's GDP grew by 3.0 percent in 2014.

In comparison to the autumn forecast, the bank has lowered its inflation forecast by 0.1 percentage point. Average annual deflation of 0.6 percent is expected this year. The bank expects prices to grow by 1.4 percent next year.

"The ongoing decline in the Russian economy and the fragile global economic environment have forced us to forecast the growth of our country's economy more cautiously as well," Raimondas Kuodis, deputy chairman of the board at the Bank of Lithuania, said in a press release, which nonetheless noted that wage and investment growth looked optimistic.

The central bank has raised the forecast for wage growth and now expects wages to increase by 4.8 percent this year and 5 percent next year. Expectations in regards to the labor market have also brightened a bit, and the institution now expects the unemployment level to decrease to 9.4 percent this year and to 9.0 percent next year. Endit